Eberle v. Drennan , 40 Okla. 59 ( 1912 )

This was a suit to foreclose a mechanic's lien, commenced by the defendant in error, R. H. Drennan, who was plaintiff below, against Lena L. Eberle and John M. Eberle, in which the other defendants in error and the cross-petitioner, the Oklahoma Brick Company, were made defendants. A referee made findings of fact and conclusions of law, upon which there was a decree entered in favor of all the lienholding defendants, except the Oklahoma Brick Company (and a few other claimants who did not appeal), whereupon Lena L. Eberle and John M. Eberle, plaintiffs in error, commenced this proceeding in error, to reverse the decree of the several lienholders, and the brick company appealed from the action of the court in refusing to allow its lien.

It seems: That on the 7th day of July, 1906, Robert Kruger and John M. Eberle signed a written contract in their own name, by the terms of which Kruger was to erect and complete a brick business house for Eberle on certain lots, which, it afterwards developed, belonged to Eberle's wife. In pursuance of said contract, said Kruger, together with one Henry Sessing, proceeded to erect the house upon said lots, and it was in furnishing materials to Kruger on this contract the liens sought to be foreclosed arose. That on the 19th day of December, 1906, and before the completion of said building, Robt. Kruger filed his voluntary petition in bankruptcy, and was on the same day adjudged a bankrupt, and Robt. Eacock was duly appointed receiver for the bankrupt estate, and the proceedings in bankruptcy were then and there duly referred to the referee in bankruptcy for final settlement. Thereafter the defendants in error filed with the clerk of the district court their several mechanics' lien statements against the property in controversy, and about the same time they each filed with the court of bankruptcy their money demand and claim against the estate of Robt. Kruger, bankrupt, covering the same items and subject-matter, and in like amount as set forth in their several mechanics' lien statements, except they did not plead their claim for a mechanics' lien in the bankruptcy court. All of the claims thus filed were approved in favor of the claimants, and judgment rendered thereon against the estate of Robt. Kruger. Thereafter Drennan commenced this action, as aforesaid, making the Eberles, the trustee in bankruptcy and all the other lien claimants parties defendant.

The contentions of plaintiffs in error are indicated by the following propositions in the form of questions quoted from the brief of their counsel:

"(1) Can a mechanics' lien be had, or maintained, where the contract for the improvement of a tract or piece of land is not made with the owner? (2) Can a sub-contractor or materialman or workman bring an action and foreclose his mechanic's lien against the owners of property, where there is no privity of contract between the owner and such sub-contractor or materialman or workman, without making the original contractor, or his personal representative, a party to such action, and procure first a personal judgment against the original contractor? (3) Were any of the mechanic's lien claimants in this case subcontractors or materialmen that come within the terms of our statute?"

The referee found, and his findings are entitled to the same weight as the special verdict of a jury, that John M. Eberle and Lena Eberle were husband and wife, and that the title to the property described was in Lena Eberle; that whilst the title to the land in question was in Lena Eberle, and the contract for the building was signed by John M. Eberle, yet he was acting as the agent of the wife in his transactions with Kruger, and all his actions were ratified by his wife, with full knowledge of all that had been done. As this finding is amply supported by the evidence, it disposes of the first contention of plaintiffs in error.

It is true, as contended by counsel, that the statute (section 6151, Comp. Laws 1909 [Rev. Laws 1910, sec. 3862]) requires that the labor or material for which a lien is claimed must be furnished under a contract with the owner of the land, but a contract made through the agency of one who is authorized to represent the owner and whose acts are fully ratified by the owner, with full knowledge of all the facts, is the contract of the owner of the land within the meaning of the statute.

On the second proposition, the referee found that, the claims having been adjudicated and allowed in the bankruptcy court, the trustee being a party to this action, and a general prayer for relief being asked, the principal obligor is sufficiently a party to this action to entitle the parties otherwise entitled thereto to a foreclosure. No authorities are cited in support of this proposition by counsel for any of the parties. Counsel for plaintiffs in error cites some authorities to the effect that an original contractor is a necessary and indispensable party to an action to foreclose a mechanic's lien by a sub-contractor. Phillips on Mechanics' Liens, sec. 395, p. 643; Rockel on Mechanics' Liens, sec. 229, p. 553; O'Brien v.Gooding et al., 194 Ill. 466, 62 N.E. 898; 27 Cyc. 435. Those cases differ from the one at bar, however, in that there was no trustee in bankruptcy in them who was made a party to the foreclosure proceedings. Whatever may be said upon the merits of the foregoing contention or the correctness of the referee's conclusion, the second contention of the plaintiffs in error must be decided against them on another ground. It is well settled that a defect of parties must be taken advantage of by demurrer if the defect appears upon the face of the pleading, otherwise by an answer, and if such objection is not made by way of demurrer or answer, then the defect is deemed to be waived. Wyman v. Herard,9 Okla. 35, 59 P. 1009; Miller et al. v. Campbell, etc., Co.,13 Okla. 75, 74 P. 507; Culbertson v. Mann, 30 Okla. 249,120 P. 918. The plaintiffs in error, having failed to raise this question in any of their pleadings, are precluded from raising it at this time.

On the third proposition, the referee found that the successful lienholders furnished the material and performed the labor which was used in the construction of said building under contracts with Kruger, the contractor. The statute (section 6153, Comp. Laws 1909 [Rev. Laws 1910, sec. 3864]) provides that:

"Any person who shall furnish any such material or perform such labor under a subcontract with the contractor, or as an artisan or day-laborer in the employ of such contractor, may obtain a lien. * * *"

There is no contention that the finding of the referee is not based upon sufficient evidence. It seems to us that under that finding the materialmen and laborers embraced therein were entitled to a lien.

There is another assignment of error, to the effect that the court erred in sustaining a demurrer to the first, third, and fourth counts of the plea and answer, filed by these plaintiffs in error to the amended petition, and several cross-petitions in the district court. As counsel has not complied with rule 25 (38 Okla. x, 95 P. viii) of this court in that he has not set forth the material parts of the pleadings to which the demurrer was sustained, together with such other statements of the record as are necessary to a full understanding of the questions presented to this court for decision, so that no examination of the record itself need be made in this court, we will not pass upon this assignment.

The finding of the referee in relation to the claim of the Oklahoma Brick Company was set aside by the court, and a new finding of fact by the court was substituted therefor, as follows:

"That the Oklahoma Brick Company, furnished the material, consisting of building brick for use in the erection of the building in controversy herein, to N.E. Sessing and Robt. Kruger, a partnership composed of Robt. Kruger and N.E. Sessing; that said brick were all used in the erection of said building, but that, the same having been furnished to the said firm of Sessing Kruger, the said Oklahoma Brick Company is not entitled to any lien on said building; that there remains due and unpaid on said account the sum of $223.56."

On the authority of First National Bank of Shawnee v.Oklahoma National Bank of Shawnee, 29 Okla. 411, 118 P. 574, the cross-petitioner contends that the court below was without authority to reject the findings of the referee and substitute findings of its own. Without passing upon that question, it seems to us the court drew an erroneous conclusion of law from the facts found by it. It is true that there is some evidence in the record tending to support the findings of the court that Kruger and Sessing were partners in so far as the brickwork of the building under construction was concerned; but, it being admitted that the brick company furnished the material for use in the building in controversy under a contract with Kruger, a member of the firm, the fact that Kruger and Sessing were partners would not deprive the claimant of its lien merely because its statement named Kruger alone as the person to whom the materials were furnished. The purpose of the mechanic's lien law is to afford security to a designated class of persons. The statute provides the procedure to be followed in order to come within the provisions of the law, and if one of that class furnishes material which is actually used in the construction of a building, and subsequently complies with the provisions of the law relative to the procedure necessary to establish a lien, he should not be divested of his right by reason of his failure to state with precision the party to whom the material was furnished. This is particularly true where it is not made to appear that the party against whose property the lien is claimed has been injured by reason of any such technical defect. The essential fact to be set out in the lien statement is that certain materials were furnished which were actually used in the construction of the building on certain described premises. The purpose of naming the contractor in such statement is apparently to apprise the owner under what authority the material was furnished, and thereby afford him protection as to payments to be made to the contractor, and unless the owner has been misled to his injury by reason of the erroneous designation of the parties to whom the materials were furnished, such a defect is not fatal.

In Putnam et al. v. Ross et al., 46 Mo. 337, the notice of claim stated that the indebtedness was due from Ross Shane, contractors. It turned out that the claim was against Ross alone, his former partner. The owners of the premises insisted that the error in the notice was fatal to the plaintiff's lien, but the court held:

"The defendants' view seems to be founded upon the theory that the mechanic's lien enactment is in derogation of the common law, and that its provisions are therefore to be construed with a rigid strictness against those who seek to avail themselves of its intended benefits. There may be decisions which lend support to that theory, but the better opinion is that the provisions of the mechanic's lien law should be interpreted so as to carry out the object had in view by the Legislature in enacting it, namely, the security of the classes of persons named in the act, upon its provisions being in good faith substantially complied with on their part. It has become the settled policy of this state, as in most, if not all, the states, to secure mechanics and materialmen by giving them a lien upon the property they have contributed to improve or create. The law itself has grown up from small beginnings to its present unquestioned importance. And the whole course of legislation on the subject shows that it has been the intention of the Legislature to avoid unfriendly strictness and mere technicality. The spirit and purpose of the law is to do substantial justice to all parties who may be affected by its provisions. It has therefore been enacted (Gen. Stat. 1865, p. 911, sec. 19) that when a party who deals with the principal contractor, and not directly with the owner, wishes to avail himself of the benefits of the enactment, he shall notify the owner, ten days in advance of filing the lien, of his purpose to do so, stating in the notice the amount of his claim, and 'from whom it is due.' The plaintiffs sought to comply with that requirement, but failed to state with precision who was their debtor, giving the name of a business firm, instead of the name of the party who had been the senior member of that firm. He gave the name of his real debtor, but erroneously coupled with it the name of a third party who was not liable. Were the defendants misled to their injury by this mistake? If so, they ought not to suffer in consequence of the plaintiffs' inadvertence. But there is no probability that they were harmed by the error. At all events it is not to be so presumed in the absence of evidence. If the error wrought the defendants any harm, it cannot be difficult for them to show it; but they aver nothing and prove nothing in that direction. Their objections rest on purely technical and overcritical grounds."

Substantially the same conclusion was reached in Tibbetts v.Moore, 23 Cal. 208, where it was held that a notice which stated that the materials were furnished to "Moore Co." was sufficient, although the materials were in fact furnished to Moore alone. And in Hauptman v. Catlin, 3 E. D. Smith (N Y Com. Pleas) 666, where it was held that where a notice stated a claim against A. and B., his wife, upon a contract with A. alone, and the contract was in fact made by the husband, acting merely as the agent of his wife, the notice was sufficient.

The Supreme Court of Kansas (First Presbyterian Church ofHutchinson v. Santy et al., 52 Kan. 462, 34 P. 974) passed upon the same question in a case somewhat similar to the case at bar. In that case the materials were actually furnished to a partnership, but in the lien statement the sub-contractor named only the individual member with whom he dealt as the contractor. In discussing the question now under consideration, Mr. Justice Allen says:

"In the statement filed by the Hutchinson Hardware Company, the trustees are named as the owners of the building, and George E. Thompson, one of the contractors, alone is named as the contractor. It is urged that this is insufficient; that the church corporation should have been named as the owner, and the firm name of Thompson, Hanna Co. should have been given as the contractors. Section 3, art. 12, of the Constitution reads: 'The title to all property of religious corporations shall vest in trustees, whose election shall be by the members of such corporation.' In the statement five persons are named as trustees of the First Presbyterian Church of Hutchinson. As the legal title to the property, under the constitutional provision, is vested in the trustees, and, as they were named, not as individuals, but as trustees of the church corporation, the statement is clearly sufficient in that respect. George Thompson, one of the firm of Thompson, Hanna Co., is alone named as the contractor. It appears that the materials furnished by the hardware company were in fact sold and charged to Thompson, but were so sold to be used in the erection of the church building, and the items charged were entered on the daybook as for the church. Thompson alone was not the contractor, but he was the head of the firm who were the contractors. He, in fact, bought all of the hardware from the company for the purpose of using it in the erection of the building. It was so used. The plaintiff in error had the full benefit of it, and unless the defendants in error have failed to comply substantially with the law, they should be protected in their lien. The object of naming the contractor would seem to be to apprise the owner and other persons by what authority and under whom the sub-contractor claims a right to his lien. Now, it might happen, doubtless often does, that subcontractors are not informed as to the names of all persons interested in the original contract and the firm name in which the contract is taken. It would not be just, nor does the spirit of the statute require, that subcontractors should be defeated of their liens if they make a mistake by incorrectly naming the original contractors, where the name is given of the contractor with whom they dealt, and who was, in fact, in charge of the work of erecting the building as a contractor. Tibbetts v.Moore, 23 Cal. 208; Davis v. Livingson, 29 Cal. 283; Putnam v.Ross, 46 Mo. 337; Brown v. Welch, 5 Hun (N.Y.) 582."

It seems to us that under the foregoing authorities the court should have allowed the lien of the Oklahoma Brick Company upon its own findings of fact. In all other respects the judgment of the court below is affirmed, and the cause remanded, with directions to enter judgment in accordance with the views herein expressed.

All the Justices concur, except DUNN, J., absent.

ON REHEARING.